Review of the Litecoin cryptocurrency: the basics of the project, in what way Litecoin differs from Bitcoin. Where to buy LTC, store it and how to mine Litecoin. Litecoin future outlook.
Litecoin is often called the crypto silver, compared to Bitcoin, which has the status of cryptocurrency gold. Litecoin was originally designed as a backup plan for BTC that hadn’t had any peers for a long time. Later, the payment system developed into an independent project, creating real competition for Bitcoin. However, Litecoin hasn’t managed to keep the silver status, stepping behind ВСН, Ripple and the decentralized networks, like ЕТН and EOS. Although the startup is gradually losing its positions, it is still a good asset for the risk diversification of your investment portfolio. Read on in the review about what Litecoin is, what its main features are, how to mine Litecoin, where to buy Litecoin and store LTC, what the Litecoin cryptocurrency is promising in future.
Litecoin cryptocurrency – a payment system to replace BTC?
In 2018, the crypto market has somehow stabilized and some distinct trends emerged. ICO boom hasn’t yet been over and is still developing; but there has appeared a certain tendency: developers are gradually giving up on the unusual ideas of startups, creating the copies (forks, clones) of the most popular cryptocurrencies. First of all, it is about payment systems and decentralized networks, like BTC and ETH. It stands to reason that, if the entire market is down, they all disappear, being replaced by the oldest, the most trusted, and still popular, cryptocurrencies.
Although these oldest cryptocurrencies have been repeatedly criticized, they are steadily included into the CoinMarketCap top list of the largest cryptocurrencies by market cap; and they will hardly be removed from it. One of such reliable coins is Litecoin, being one of the most flexible, advanced and promising. The cryptocurrency is traded on almost all global exchanges, except for the “pocket” ones (developed especially for a particular project). Its code is being constantly upgraded; it may even reach the BTC market cap one day. Read on in the article about what Litecoin is, what its main features are, how to mine Litecoin, where to buy Litecoin and store LTC, what the Litecoin cryptocurrency is promising in future.
Litecoin cryptocurrency review: basics, mining, future outlook
The project was founded by Charlie Lee, who is now one of its main developers. The LTC cryptocurrency was originally designed as the BTC equivalent, a kind of backup currency. In 2011, its main code was developed, copying the BTC code, but with greater capacity. In 2013, the project was globally recognized, being the second largest cryptocurrency by market cap. Later, the Litecoin network was corrected, in terms of LTC mining algorithm, transaction speed and the number of coins. For both coins, blockchain is constructed in the same way; the difference is in hashing algorithms, they utilize. Both coins are based on the Proof-of-Work consensus algorithm.
Differences between Litecoin and Bitcoin:
- The total number of Litecoins is 84 million coins; about 56 million of coins have been already mined (BTC amount is limited by 21 million coins, and 27 million of coins have been already discovered.
- Bitcoin uses the SHA-256 hashing algorithm; Litecoin uses Scrypt algorithm.
- LTC calculations are 4 times faster than those by Bitcoin. 6 blocks are generated during 15 minutes.
- Future introduction of the Atomic Swap technology that will allow paying for goods in both Bitcoins and Litecoins. For example, if a seller accepts only BTC, you will be able to pay with LTC as well (automated converting) without any commission. The technology hasn’t yet been integrated, but it may become a significant competitive advantage over BTC in future.
- It is protected from double spend. One tier network rules out the intervention by any outsiders.
Litecoin and Bitcoin are very similar. The LTC developers were aiming at the same objective, increasing the transaction speed. They partially succeeded but couldn’t exceed the BTC popularity. There are two reasons for this:
- Bitcoin is more trusted by investors and has legal support in some countries. Even though the Litecoin idea seems to be promising, investors prefer a more reliable asset.
- Bitcoin hasn’t got a single founder, it was developed by a team, and the network itself is fully decentralized. Litecoin was created by a single person, Charlie Lee, who was holding a substantial share of the coins through late 2017. This dependence was scaring investors off, who worried about the possible LTC price manipulation.
The startup official website doesn’t look very convincing. It consists of a single page, where the main information is mostly about the wallets, shops and exchanges. There is no White Paper, no clear description of the project and its advantages, no information about developers. It is puzzling why such a serious startup doesn’t have any information support. That is one of the reasons why Litecoin is behind its competitors. Some information can be found on the website litecoin-foundation.org, but it is not convenient, to say the least.
Where to buy Litecoin and store LTC
It seems that, due to the Litecoin popularity, it should be distributed equally on the exchanges; it would mean reduced risks and investors’ interest all over the world. However, the most of Litecoin is traded on OKEx (okex.com), about 27%-30%. You can buy LTC here only for USDT BTC, but ETH or fiat is not traded there. Although the exchange is one of the largest, it is surprising why Huobi or Bitfinex trade far less of Litecoin. It would be reasonable to remember about the criticism of Charlie Lee. He was charged with LTC price manipulations when he was one of the developers on Coinbase.
Litecoin was enlisted by over 300 cryptocurrency exchanges, but the coin is traded on just a few dozen of them. The second position after OKEx is taken by the Binance exchange (binance.com), with the turnover about 10% -12%; there, you can also exchange LTC only to USDT or BTC. About 5% -9% of Litecoin is traded on GDAX (gdax.com), Binance, Huobi (huobi.pro/ru-ru/), Bitfinex (bitfinex.com), Bit-Z (bit-z.com). Only a few exchanges offer an opportunity to buy LTC for the South Korean won or ETH.
As for the LTC share in the total turnover, traded on each exchange, the cryptocurrency is behind its main rivals - BTC, ETH, XRP, EOS, ВСН. On Binance, LTC is traded even less than TRON and Loom Network, on Huobi, it is behind Cortex, on Bit-Z - TRON, on OKEx - True Chain. It is not so safe to store you coins on cryptocurrency exchanges as they are often hacked. The alternative way can be to store your LTC on the wallets; their list is on its official website. It includes online wallets, cold and hardware ones for various types of storage media. I suggest applying only wallets, officially recommended, to avoid the risk of losing your cryptocurrency.
Another alternative, for cryptocurrency day trading, is Forex. It has a number of advantages:
- You can open not only long positions, but short ones as well. You are able to apply any trading strategies that can’t be traded on the exchanges, due to the technical features; you can also use expert advisors.
- The account is safe (it is protected from hacks and illegal money withdrawal). You can recover you password if you lose it (the wallet’s key can’t be restored).
- The transactions are executed instantly.
LiteForex has a pleasant surprise for those, who are interested in this way to make extra cash. LiteForex has added cryptocurrency pairs to the list of trading instruments, so you can now make money on their exchange rates not only to the U.S., but to other cryptocurrencies as well. You can learn more here.
As Litecoin appeared relatively long ago and the problem of mining was not faced by the developers, they just copied the mining algorithm that has now proved to be not effective. In theory, the coins can be mined by means of CPU or graphic cards; but these types of mining haven’t been cost-effective for a long time already. The only efficient way of LTC mining is ASICs, but the initial investment is about $10,000. That is why LTC cryptocurrency is appealing only for miners with big farms; individual miners prefer BCH and other simpler coins.
Litecoin cryptocurrency prospects for investors
Litecoin is called “the silver, second after the gold”; it means that the LTC is the second after Bitcoin by its significance. However, the LTC cryptocurrency, which used to be in the TOP-3 list, is now not included in the TOP-5, being rather shaky at the sixth position. Buy its market cap, Cardano is about to drive Litecoin one level lower. And Stellar, actively developing now, is catching up with it. It can be explained by several factors.
- New payment systems have appeared, taking a part of the old ones’ popularity. First of all, it is about numerous forks of Bitcoin, and a new class of cryptocurrencies, a combination of blockchains (for example, the combination of Bitcoin and ZClassic). Bitcoin is supported with strong confidence in it and recognition in many countries; but it is far more difficult for other payment networks to enter the top list.
- Competition from decentralized networks. Any startup should be useful from a practical point of view, first of all. If most payment systems are now at the stage of models, the software, based on decentralized network, is being actively developed. That is why Litecoin is now less popular than Ethereum or EOS.
Litecoin future prospects are quite promising, but it will hardly enter the TOP-5 list (let alone the TOP-3). The payment system is being developed and improved all the time; it is promoted in the media and on the Internet forums. But its competitors are also developing; the closest one is Bitcoin Cash that far ahead LTC.
The Litecoin price chart shows that it is much more profitable to trade ВТС/LTC, than to trade USD to LTC. The LTC to USD price was more or less steady until 2018 (that is speculators were not interested in Litecoin); however the LTC to BTC rate was constantly changing. It resulted not only from Litecoin itself, but, rather, from the BTC price moves. It is clear from the Litecoin price chart in 2018 that investors have become more interested in LTC cryptocurrency. Note that in January, 2018, when the entire crypto market was about 3-3.5 times down, Litecoin dropped only by half; it suggests that it is not that vulnerable to various kinds of turmoil.
One of the crucial factors, affecting the investors’ interest in cryptocurrencies is the news background. In late February, 2018, LTC developers announced the launch of LitePay, a technology that would allow retail sellers to instantly make and settle the payments in any part of the world. According to the project website, the technology would provide protection from volatility, due to the instant exchange of LTC to the common currency units, creating thus competition to the exchanges. With the commission fee of 3% for the payment cards, the LitePay technology would cut the costs down to 1%. The planned launch of the network hasn’t occurred, its further development isn’t yet clear. After the failed launch of LitePay (supposedly, because of hostile activities of the card issuers against cryptocurrency companies), the LTC dropped down and hasn’t recovered to the previous levels.
In future, it will be the news that will determine Litecoin rate. By the way, the startup founder Charlie Lee got rid of all his LTC holdings in December, 2017, having sold his coins at their price high. After LTC price had hit its record high at $359 on December 19, 2017, he sold his share, explaining that so he wouldn’t be charged with the LTC price manipulations. The coin became cheaper by half in a few weeks after that.
But still, the Litecoin future outlook is rather positive. The startup is being supported by various platforms; nowadays, its performance will depend on the developers alone. You can pay LTC for products in some online shops, though, their number is yet rather limited.
Encouraged by the BTC experience, the LTC network participants decided to launch their first hardfork in February, 2018. As a result of the division, the Litecoin Cash cryptocurrency appeared (similar to BCH); but it wasn’t successful. After it had been launched, the coin price surged up to $6, but then dropped down to $0.2-$0.5 and never went up again. Although it takes 158th position by the market cap, the fork is not appealing for investors.
Conclusion. Litecoin is a second-tier good coin, being behind only BTC and BCH payment systems, because of some flaws in its development. (Ripple and decentralized networks are not taken into account, because they are of a different type). The Litecoin price will hardly feature a steady growth; but, on the other hand, it provides an opportunity to make profits from it price swings in both directions in Forex. To anticipate the Litecoin rate, monitor the news and remember about your portfolio diversification. I wish you successful trading!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.